Can Grandchildren Be Considered Dependents on Taxes?

Grandparents sometimes find themselves providing much of the care and support for one or more grandchildren. If you are dealing with this situation, you may be able to claim your grandchildren as dependents on taxes. If a grandchild can be considered a qualifying child, you stand to benefit from some very nice tax breaks.

Dependent Grandchildren

The standards used to determine who can claim a child as a dependent are set out in the Working Families Tax Relief Act of 2004. These standards are also used to establish eligibility for a number of tax credits. You may be able to claim a grandchild as a dependent provided she is not claimed by someone else and you are not claimed as a dependent by another person.

Relationship

Grandchildren are possible dependents because they are the descendents of your own children, according to the Internal Revenue Service. The eligibility of descendents includes stepchildren, adopted children, foster children and the descendents of your siblings or step-siblings. When another person also claims a child as a dependent, a parent’s claim takes precedence. If a parent is not one of the people claiming a child, the person with the highest adjusted gross income gets to claim the child as a dependent.

Other Requirements

In general, a qualifying grandchild must be under 19 at the end of the year. Lower age limits apply for some tax credits. The age limit goes up to 24 if a grandchild is a full-time student for at least five months of the year. No age requirement applies when a child is permanently disabled. The grandchild must live with you for at least one-half of the year and may not provide more than one-half of his own support. Children have to be U.S. citizens or nationals and reside in the United States, Mexico or Canada.

Benefits

Each dependent grandchild entitles you to a dependent exemption of $3,800 as of 2012. The exemption is subtracted from your taxable income. You may also be able to claim one or more of four tax credits. These are the Child Tax Credit, Additional Child Tax Credit, Earned Income Tax Credit and the Child and Dependent Care Tax Credit.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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